Mumbai: Renewable power producer Mytrah Energy (India) Pvt. Ltd is likely to repay the $277 million debt it had raised from the Piramal Group, with the help of a proposed investment from Canada Pension Plan Investment Board (CPPIB), said two people aware of the development.
Canadian pension fund CPPIB is expected to invest at least $500 million in Mytrah, said the first person cited above, requesting anonymity.
“Mytrah has been in talks with CPPIB for a couple of months now. They want to invest the money for growth capital. But part of it will be used to buy out the high-cost debt the company had raised last year. The rest will be used to fund business growth. However, the transaction closure is still some time away."
According to the second person, the transaction might see CPPIB ending up with a majority stake in the company, given the size of the investment.
In September 2017, Mytrah had raised ₹ 1,800 crore ($277 million) from the Piramal Group through non-convertible debentures. It had used the money to provide exit to existing investors, including IDFC Alternatives Ltd and AION Capital, Merrill Lynch and Goldman Sachs, besides meeting its growth capital needs.
Mytrah is an independent power producer with 2,000 megawatts (MW) of operational and under-development capacity. It has 15 wind power assets across Rajasthan, Gujarat, Madhya Pradesh, Maharashtra, Andhra Pradesh, Telangana, Karnataka, Punjab and Tamil Nadu.
Email queries to Mytrah joint managing director Shirish Navlekar, and CPPIB and Piramal group spokespersons did not elicit any response.
In June, The Economic Times had reported that CPPIB was in talks to acquire a minority stake in Mytrah.
Talks with CPPIB follow the delisting of Mytrah’s holding company from the London Alternative Investment Market (AIM) in May.
Hyderabad-based Mytrah Energy had listed on the London Stock Exchange’s sub-market in 2010 when it had raised $80 million from institutional investors.
In April, Raksha Energy Holdings Ltd, headed by Mytrah chairman and founder Ravi Kailas, had made an offer to buy shares of the company from other shareholders, to take it private. The delisting valued the holding company at $78.9 million.
Mytrah had also hired investment banks to start work on a domestic IPO, Mint had reported in September 2016.
For Canadian pension fund CPPIB, this will be the second major investment in the Indian renewable energy sector.
The largest Canadian pension fund had invested $391 million in India’s largest renewable energy producer ReNew Power Ltd across two tranches.
Other major investors in the renewable energy space include sovereign wealth funds GIC Holdings Pte Ltd, Abu Dhabi Investment Authority (ADIA) and Canada’s second largest pension fund Caisse de dépôt et placement du Québec.
In June, GIC and ADIA had said that they will invest $450 million (around ₹ 3,000 crore) in Greenko Energy Holdings in one of the largest funding rounds by an Indian clean energy producer.
Mint reported in January that CDPQ is looking to acquire a stake in CLP India Pvt. Ltd, one of the largest foreign investors in the Indian power sector.
In 2016, CDPQ had also picked up a stake in Indian solar power producer Azure Power.